Water management: Water and oil do mix

MARK PATTON, CONTRIBUTING EDITOR 

35th Annual Produced Water Society Conference. I recently attended the Produced Water Society Conference in Sugar Land, Texas. There were over 400 people from all over the world. For those not familiar, “produced water” is water that is cogenerated with oil and gas, typically formation water that is saturated with minerals and too saturated and salty in most cases to be considered a water source.   

As a result, this water is reinjected back into the earth in Class 2 disposal wells. The Produced Water Society consists of members of government agencies, academia, major oil companies, water treatment companies, landowners and others that manage produced water. This interesting mix makes for wide-ranging topics and discussions on all things produced water, stuffed into three days of presentations, panel discussions and round table discussions.  

The same problem. With all the excitement around the topic of produced water, there was a general and obvious concern over where we go from here. Let’s discuss why this concern exists. The Permian basin has emerged as one of the largest oil-and-gas-producing regions in the world, and it is mostly due to the Delaware and Midland basins within the larger Permian basin. Each of these basins is facing an earthquake or seismicity problem that has grown to the point that deeper disposal wells are being shut down or having restricted capacity. This is putting a strain on shallower disposal wells, and we are seeing older abandoned wells cause surface leaks of produced water. This is occurring while we are seeing political pressure to “drill baby drill.”  

To understand the magnitude of this problem, about 4-6 times more water is produced than oil in the Permian basin alone. In 2024, this was 8.7 Bbbl or, if you prefer, 365.4 billion gallons. Only 20-30% of this is recycled as a completion fluid, with the vast majority going to disposal wells, which again have a seismicity problem. I mentioned that this water is very saturated with minerals and salt, making it unsuitable for reuse. The typical response from most water treatment folk is to just desalinate it. The problem is that today’s desalination technologies or those most commonly used are membrane-based reverse osmosis, which cannot handle the high slat and mineral loading.   

So, the race is on for a desalination technology that can handle the high salt and mineral content. What has been successful to date are thermal technologies, but the cost of heating then cooling water to condense the vapor back to water is quite energy-intensive and expensive. Agricultural reuse is also considered, where you can partially desalinate and use produced water on certain non-food crops, and pilots have been conducted where this is an effective strategy. Unfortunately, there are regulations that stand in the way in some areas or the need for regulations to allow this practice while you have environmental groups fighting to stop it. 

As you can see, this is a complex problem—producing more oil for an area that can barely keep up with the produced water it generates today, while capacity for this water is being reduced, due to seismic activity. As time passes by, the cost of disposal is increasing, but there still remains a large gap between disposal costs versus readily available desalination costs, and there continue to be restrictions or regulatory hurdles that have yet been overcome to allow this practice. 

The same page. The good news is that at the 35th Annual Produced Water Society Conference, you had regulators, technology providers, NGOs, oil companies, and landowners/farmers all in the same room, working together to solve the same problem—turn produced water into a new water source. Typically, the hard part is to get all stakeholders to agree and while not all stakeholders were at this meeting, this is a great start.  

Some interesting was a new group to the mix, the Water Positive Think Tank. Now, I have talked about the concept of water positivity before, but essentially it is reducing your water consumption and then replacing whatever water you do consume with new water. Many major Fortune 500 companies have taken water positivity pledges. Many of them look at this as the next Carbon Zero movement. In full disclosure, I was invited to join this international group of water professionals last year, but I was not aware that a member would be speaking until he sought me out the day before his presentation. 

Water Positive and the Blue Premium. Robert Hulz with the Water Positive Think Tank put on a presentation on Day 2 called “Driving Sustainable Water Management through the Water Positive Initiative and Blue Premiums Reduction Strategies in the Permian Basin.” The Blue Premium is basically the cost to become water positive. In the case of “produced water,” it would be the difference in cost to reuse produced water outside of the oil field, as compared to disposal.   

There were many general concepts introduced, but I would like to add to that list, because I think it’s important. Reuse options are on the top of the list, like Industrial reuse which was a topic, and when you consider best uses, which I’ll define as lowest-cost options or where minimal treatment is required, as in cooling and other industrial uses where produced water can be considered. Then there is agricultural reuse, which we discussed, that has some applications.  

What about enhanced oil recovery (EOR), also known as waterflooding? Today, we use produced water in conventional oil reservoirs to enhance oil recovery. Combined with CO₂, this increases the oil recovery and creates carbon offsets. Expanding this program would use more produced water, create more carbon offsets, and produce more oil. Now, that’s a combination I can get behind. 

Consider Data Centers, where people are now looking to put Data Centers in the oil field to use field gas to generate cheap energy. These same locations also need large volumes of water and produce CO₂ that can be used in EOR. 

The goal with the Blue Premium is to reduce it to the point that it has little effect on the price of oil. There are other things to consider here like tax credits, grants and water markets, where people have a water deficit and will pay a premium for water. All of these things can reduce the Blue Premium. But what about water offsets.? 

Water offsets? When Carbon Zero became a thing, carbon markets developed, where people paid for offset credits to get to carbon zero. It’s not unfathomable to see this same thing develop in the Water Positive movement. As more companies look to join the movement, they will likely be willing to buy offsets to get to Water Positive. And the Permian basin isn’t unique. There are regions in the Middle East, South America, Europe and Asia that have high water cuts, where they produce more water than oil. It’s not like we discover new water sources every day, but we potentially have one in produced water that is more than significant all around the world, solving water scarcity and drought problems. 

The oil and gas industry has a huge opportunity here. Imagine becoming one of the world’s largest suppliers of new water—we are getting closer. Until next month.